Lowe's puts hold on 2 city stores

Lowe's has halted plans for two home-improvement centers in Chicago while Mayor Richard Daley weighs whether he will try to block the city's new "big-box" minimum-wage ordinance, a South Side alderman said Tuesday.

The company's concerns about the law caused it to shelve plans for stores at 83rd Street and Stewart Avenue and at 79th Street and Cicero Avenue, said Ald. Howard Brookins Jr. (21st).

"They changed their mind," said Brookins, whose ward includes the proposed store at 83rd and Stewart. "They now want to wait and see what happens."

Daley opposes the ordinance, which was passed by the City Council on July 26, but he has refused to say whether he would veto it. He has until Sept. 13 to decide whether he will exercise his veto power for the first time in his 17-year tenure as mayor.

David Katz of Northbrook-based A&R Katz Management Inc., which manages the Scottsdale Shopping Center at 79th and Cicero, confirmed that Lowe's officials have postponed closing the deal for a new store there.

"They won't sign the lease at this point," Katz said. "They are waiting to see if the mayor will veto the ordinance. Chances are they will pull out" unless the ordinance is vetoed.

Attempts to reach Lowe's officials in the Chicago area and at the company's North Carolina headquarters were unsuccessful.

The moves by Lowe's add fuel to the contentious fight over the ordinance. Labor unions pushed for the ordinance, but critics say it would stunt economic development in parts of Chicago that lack retail stores.

Officials of Wal-Mart Stores have said that as many as 20 new outlets in Chicago that had been in the planning stages were on hold because of the ordinance. And last week, it was revealed that Target Corp. has taken a similar stance on a list of planned stores here. They include one that was to have been an anchor of a $90 million shopping center on a long-vacant site at 119th Street and Marshfield Avenue and another that was to have anchored the Wilson Yard development, a $113 million project in Uptown.

Meanwhile, Daley stepped up the rhetoric against the ordinance Tuesday, contending that suburban mayors are salivating at the prospect of getting retail development that won't be coming to Chicago.

His colleagues in suburbia "love it," the mayor said of the ordinance. "I think they will support the City Council for doing this because they are going to get all the construction, all the jobs, all the sales tax and real estate taxes.

"But you are not going to get any in Englewood," he said at a news conference on an unrelated subject in the impoverished South Side neighborhood.

Daley's hammering away on the subject appeared to be an attempt to lay the groundwork for a veto.

One alderman who voted for the measure said he hasn't been asked by the mayor's office to change his position if there is a veto-override vote. But if the request comes, he said he would comply because Daley "has been good to my community."

The alderman, who spoke on condition of anonymity, said he also senses a softening of support for the ordinance among some of his council colleagues.

The measure passed by a vote of 35-14. Daley would have to persuade two council members to switch sides if he decides to exercise a veto. A veto override would require 34 votes.

Ald. Joe Moore (49th), sponsor of the measure, said he has seen no erosion of support among his fellow council members. And, he added, "I think there is a potential to pick up some votes we didn't get the first time.

"I would wager any vote he can pick up, we can pick up a vote we didn't have before," on "a very, very popular ordinance" with voters, Moore said.

The big-box measure applies to stores of at least 90,000 square feet operated by firms with $1 billion or more in annual sales. By 2010, the minimum wage for employees will be $10 an hour and $3 in fringe benefits. Automatic annual cost-of-living increases will apply thereafter.

By comparison, the federal minimum wage is $5.15 an hour, while the state minimum is $6.50, though both amounts can be less if employees receive tips.

Wal-Mart on Monday announced that it was raising pay for entry-level workers by an average of 6 percent at about one-third of the company's stores, but Daley scoffed at the notion that Chicago's new law influenced the giant retailer.

"None whatsoever," he said about the ordinance's role in a company decision that Daley portrayed as routine.

Moore challenged Daley's contention that big retailers will steer clear of Chicago because of the ordinance.

The giant companies already have saturated suburbia with stores, and "we have huge density," the alderman said. "We have people who want to spend money. We have a large city, so people in the center core are not going to drive miles to save 10 cents on toilet paper. That is why retailers want to locate here."

After the dust has settled, Moore and other minimum-wage proponents believe the big retailers will continue their march into the city.

Many big-box ordinance supporters focused on Wal-Mart.

"If you don't like Wal-Mart, you don't like Wal-Mart," Daley said. "But don't include everybody in. It's like saying, `I don't like one person in a community. I am going to condemn the whole community.'"